Qatar Petroleum unit plans $880m IPO

Doha, September 23, 2013

Qatar Petroleum, the state-owned energy firm, has picked two banks to help arrange an initial public offer of shares in one of its units, an issue which could be worth around 3.2 billion riyals ($880 million), two banking sources said.

Mesaieed Petrochemical Holding may conduct the IPO on the Qatar stock exchange before the end of this year, subject to necessary approvals being granted, one of the sources said, speaking on condition of anonymity as the information isn't public. It would be Qatar's first IPO in three years.

Qatar National Bank has been chosen to manage the offer while Deutsche Bank will act as financial adviser, the two sources said. Qatar Petroleum declined to comment.

The sale of shares in the IPO will be restricted to Qatari nationals, although foreign investors will be allowed to buy a certain percentage of the firm once it has been listed, the second banking source said.

Gulf states often sell stakes in state-owned companies at significant discounts to citizens as a means of spreading their enormous hydrocarbon wealth.

In May, an executive board member of Qatar Holding, the investment arm of the Gulf state's sovereign wealth fund, said Qatar Petroleum planned to offer shares in four of its units in coming years, without specifying the firms involved.

IPOs in the Gulf, outside of Saudi Arabia, have been rare in recent years as investors shied away from stock markets after suffering huge losses in the global financial crisis. The last IPO in Qatar was Mazaya Qatar Real Estate Development Co in 2010.

However this year, buoyed by a wider rebound in global equities, strong domestic economies and index compiler MSCI's decision to upgrade Qatar and the United Arab Emirates to emerging market status, regional stock markets have jumped and companies are beginning to go public again.

However, a planned stock market listing for Doha Global Investment Co, a $12 billion Qatari investment company backed by assets from the Gulf state's sovereign wealth fund, was postponed in May and it is not clear when it might go ahead.

The Qatar Exchange has an equity market capitalisation of about 530 billion riyals, suggesting the Mesaieed Petrochemical listing could be easily absorbed.

Bank of London and The Middle East, Britain's largest stand-alone Islamic bank, plans to seek a listing on the Nasdaq Dubai bourse next month in what would be the emirate's first stock listing for over four years. - Reuters